Constitution of India · Section Article 286
Restrictions as to imposition of tax on the sale or purchase of goods
Article 286 — Restrictions as to imposition of tax on the sale or purchase of goods
- Restrictions as to imposition of tax on the sale or purchase of goods.—(1) No law of a State shall impose, or authorise the imposition of, a tax on 1[the supply of goods or of services or both, where such supply takes place]—
- (a) outside the State; or
- (b) in the course of the import of the goods or services or both into, or export of the goods or services or both out of, the territory of India.
*] (2) Parliament may by law formulate principles for determining when a supply of goods or of services or both] in any of the ways mentioned in clause (1). (3) * * * *]
Plain English Summary
This article states that no state can create a law to charge a tax on selling or buying goods or services if that transaction happens outside the state, or if the goods or services are being imported into India or exported out of India. It sets boundaries for state taxation on trade activities across borders.
Key Points
- States cannot impose taxes on the supply of goods or services if the supply takes place outside their territory.
- Taxes cannot be imposed on the import of goods or services into India.
- Taxes cannot be imposed on the export of goods or services out of India.
- Parliament has the power to make laws defining when a 'supply' occurs in these cross-border situations.
Why It Matters
This provision ensures that internal state taxes do not interfere with international trade and commerce, keeping taxation consistent across the country for cross-border activities.
Landmark Judgements
No major landmark judgements.